Variable Cost
Finance
Variable Cost
Cost that changes in relation to production, sales or activity volume.
Examples
- 01Raw material, packaging and machine electricity are variable costs that rise with every additional unit produced.
- 02The controller reviews variable costs per unit monthly and sees a rise when a cheaper but less efficient supplier is used.
- 03Reducing scrap from 5 % to 2 % lowers variable costs per good unit, which is confirmed in the next cost run.